YAHOO [BRIEFING.COM]: The
S&P 500 had sported a gain of more than 5% only minutes before the toll of
the closing bell, but some late selling pressure caused it to settle off of its
session high. As a result, the stock market couldn't quite surpass what was
achieved this past Tuesday, when the stock market swung 6% from its session low
to its session high to score its best single-session gain since a 7% surge in
March 2009.
The late flurry of selling
came as some participants, fearful that ongoing volatility could send stocks
sharply lower tomorrow, opted to capitalize on the bounce by liquidating their
positions. After all, today's climb was really just a relief rally, rather than
a surge driven by the improvement of fiscal and financial conditions among the
eurozone countries and their banking institutions.
Participants did get some
positive data, though. Initial jobless claims for the week ended August 6
totaled 395,000, which is down from the 402,000 claims filed in the prior week
and less than the tally of 409,000 that had been widely anticipated. The latest
tally marks the first time since early April that the initial claims count fell
below 400,000. Still, traders remain mindful that more than one modest downtick
in weekly jobless claims is needed to ramp up the economic recovery.
Nonetheless, stocks settled
sharply higher, giving bargain hunters what they wanted. Financials led the
action for the fourth straight session. The sector surged more than 6% in the
latest round of action. The sector's surge came even though many analysts
aren't yet willing to upgrade bank stocks for fear of undesirable loan exposure
or, in some cases, uncertainty related to capital levels.
Several natural resource plays
were upgraded, however. Chevron (CVX 94.07, +3.50) and Exxon
Mobil (XOM 71.58, +3.55), along with US Steel (X
30.51, +1.65) and AK Steel (AKS 9.05, +0.81) all benefited
from favorable analyst reviews. Cisco Systems (CSCO 15.92,
+2.19) won an upgrade from analysts at Morgan Stanley after the Dow component
posted an upside earnings surprise for the latest quarter. Shares of CSCO rallied
hard in response.
Amid the stock market's climb,
gold bugs took a breather from buying. That left the precious metal to slide
1.8% to $1751.50 per ounce for its first loss in five sessions.
Treasuries also turned lower,
sending the yield on the 10-year Note back above 2.30%. Selling intensified in
the wake of a 30-year Bond auction, which drew a bid-to-cover of 2.08, dollar
demand of $33.3 billion, and an indirect bidder participation rate of only
12.2%. For comparison, the prior auction drew a bid-to-cover ratio of 2.80,
dollar demand of $36.4 billion, and an indirect bidder rate of 37.8%.
A rebound in equities pressured
precious metals today. In turn, December gold settled lower by 1.8% at $1751.50
per ounce for its first loss in five sessions. Futures have since extended
their pullback in after-hours trade, notching fresh lows at $1734.50. One theme
at hand, the CME hiked margins again on the gold contract, but that news had
little effect on futures in overnight action as prices climbed to a new
all-time high at $1817.60 per ounce.
September silver shed 2.0% to
close at $38.67 per ounce after they had rallied off their lows of $37.94.
Silver prices had been probed the $39 level in intraday trade.
September crude oil settled
higher by 3.4% at $85.72 per barrel. Crude spent most of the day rallying off
of its low of $81.03. Buying accelerated into the close of pit trade, helped
along by an extension of gains by the equity market. Crude set a session high
of $85.90 per barrel along the way. The advance this session makes for crude
oil's first back-to-back bounce since the commodity started to slide from the
$100 area.
September natural gas finished
2.7% higher at $4.11 per MMBtu. This morning's inventory data, which showed a
smaller-than-expected build, helped futures hit a seven-session high of $4.14
per MMBtu before pulling back.
Advancing Sectors: Telecom +2.5%, Consumer Staples +3.1%,
Utilities +4.2%, Consumer Discretionary +4.5%, Tech +4.5%, Industrials +4.5%,
Health Care +4.7%, Materials +4.9%, Energy +5.2%, Financials +6.3%
Declining Sectors: (None)DJ30 +423.37 NASDAQ +111.63 NQ100
+4.5% R2K +5.4% SP400 +1.8% SP500 +51.88 NASDAQ Adv/Vol/Dec 2217/3.13 bln/430
NYSE Adv/Vol/Dec 2869/1.88 bln/243